On August 4, 2016 Tetraphase Pharmaceuticals, Inc. (NASDAQ:TTPH), a clinical stage biopharmaceutical company developing novel antibiotics to treat life-threatening multidrug-resistant (MDR) infections, reported financial results for the second quarter ended June 30, 2016, and provided an overview of certain corporate achievements and plans (Press release, Tetraphase, AUG 4, 2016, View Source [SID:1234514266]).

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"During the second quarter, we finalized the protocol for IGNITE4, our upcoming phase 3 clinical trial evaluating IV eravacycline in patients with complicated intra-abdominal infections (cIAI), and remain on track to initiate this trial early in the fourth quarter of 2016," said Guy Macdonald, Tetraphase’s President and Chief Executive Officer. "Based on discussions with the FDA, we have designed IGNITE4 using a 12.5% non-inferiority margin and a trial population of approximately 450 patients. We currently anticipate reporting top-line results from IGNITE4 as early as the fourth quarter of 2017. In parallel, we are also working to finalize the trial design for IGNITE3, our phase 3 clinical trial evaluating once-daily IV eravacycline in complicated urinary tract infections (cUTI), and we look forward to providing details regarding the design and timing of IGNITE3 once the protocol is completed."

Dr. Patrick Horn, Tetraphase’s Chief Medical Officer, commented, "Separately, we continue to advance development work on the oral formulation of eravacycline. Early data from this phase 1 program indicate that the oral dosing regimen used in IGNITE2 leads to lower systemic levels of eravacycline than expected. These data also suggest that administration of oral eravacycline in a fasted state results in increased drug exposure. With this information now in hand, we have commenced further clinical testing designed to evaluate several additional variables associated with optimizing the oral eravacycline dosing regimen."

"Along with the advancement of our clinical programs, we continue to build the profile of eravacycline by testing it against multidrug-resistant bacterial strains in vitro and, at ASM Microbe and ECCMID we presented data showing eravacycline’s potent activity against these difficult-to-treat pathogens, including carbapenem-resistant enterobacteriaceae and Acinetobacter baumannii," added Dr. Horn. "We also recently confirmed that in in vitro studies eravacycline retained its potent activity against colistin-resistant clinical isolates expressing the mcr-1 gene, which was just found in bacteria in the U.S. for the first time, and we look forward to presenting these data at an upcoming medical meeting."

Second Quarter 2016 Financial Results

As of June 30, 2016, Tetraphase had cash and cash equivalents of $178.3 million and 36.7 million shares outstanding. The company expects that its cash and cash equivalents, as well as expected revenue from its U.S. government awards, will be sufficient to fund operations into the middle of 2018.

Revenues during the second quarter of 2016 were $1.2 million compared to $3.3 million for the same period in 2015. Revenues for each period consisted of contract and grant revenue under the Company’s U.S. government awards for the development of Tetraphase compounds for the treatment of diseases caused by bacterial biothreat pathogens and for certain infections caused by life-threatening multidrug-resistant bacteria. The decrease in revenues was primarily due to the scope and timing of activities related to our BARDA Contract conducted during the quarter ended June 30, 2016.

Research and development (R&D) expenses for the second quarter of 2016 were $13.7 million compared to $22.9 million for the same period in 2015. The decrease in R&D expenses was primarily due to lower costs related to our Phase 3 clinical program for eravacycline.

General and administrative (G&A) expenses for the second quarter of 2016 were $4.8 million compared to $6.5 million for the same period in 2015. The decrease in G&A expenses was primarily due to a decrease in stock-based compensation expense, as well as a decrease in pre-commercialization activities for eravacycline.

For the second quarter of 2016, Tetraphase reported a net loss of $17.2 million, or $0.47 per share, compared to a net loss of $26.0 million, or $0.72 per share, for the same period in 2015.

Second Quarter and Recent Corporate Highlights

Presented data at the 26th European Congress of Clinical Microbiology and Infectious Diseases (ECCMID), including preclinical data for eravacycline and TP-6076.

Received guidance from the U.S. FDA confirming that one additional positive phase 3 clinical trial will be required to support a New Drug Application (NDA) submission for IV eravacycline. Based on the FDA’s guidance, Tetraphase plans to conduct two additional pivotal phase 3 clinical trials: one in cIAI (IGNITE4) to support the NDA filing and one in cUTI (IGNITE3) that will form the basis of a supplemental NDA for IV eravacycline.

Finalized the clinical trial design for IGNITE4 to support an NDA filing for IV eravacycline for cIAI. IGNITE4, the Company’s planned phase 3 clinical trial evaluating the efficacy and safety of twice-daily IV eravacycline compared to meropenem in patients with cIAI, is expected to enroll approximately 450 patients and the primary analysis will be conducted using a 12.5% non-inferiority margin. Tetraphase expects to initiate this clinical trial early in the fourth quarter of 2016, with top-line results expected as early as the fourth quarter of 2017.

Presented data at the American Society of Microbiology (ASM) Microbe 2016 Conference, including clinical and preclinical data for eravacycline and preclinical data for TP-271, a novel, broad-spectrum antibiotic candidate which is being developed to combat respiratory disease caused by bacterial biothreats and antibiotic-resistant public health pathogens, as well as bacterial pathogens associated with community-acquired bacterial pneumonia.

Commenced patient dosing in a phase 1 clinical trial for TP-6076, the lead candidate from the Company’s second-generation antibiotic program which has demonstrated potent preclinical activity against multidrug-resistant Gram-negative pathogens.
Continued clinical testing designed to advance the development of an oral dose formulation of eravacycline. During the second quarter, Tetraphase completed preliminary clinical testing which indicates that the overall efficacy results in IGNITE2 were likely driven by underperformance of the oral formulation due to a food effect. Preliminary clinical testing also suggests that administration of oral eravacycline in a fasted state results in increased drug exposure. Further clinical testing is now underway to evaluate several additional variables associated with increasing drug exposure and optimizing the oral eravacycline dosing regimen.
Added to the Russell Microcap Index when the Russell Investment Group reconstituted its family of U.S. indexes in late June 2016.

On August 4, 2016 Teva Pharmaceutical Industries Ltd. (NYSE: TEVA) reported results for the quarter ended June 30, 2016 (Press release, Teva, AUG 4, 2016, View Source;p=RssLanding&cat=news&id=2192894 [SID:1234514316]).
Q2 2016
Revenues $5.0 billion
GAAP EPS $0.20
Non-GAAP EPS $1.25
Non-GAAP EPS adjusted to exclude the impact
of the December 2015 equity offerings
$1.43

On August 2, Teva completed the Actavis Generics acquisition
On August 3, Teva agreed to acquire Anda for $500 million
"We are pleased with our performance this quarter and the steps we are taking to transform our business, notably the recent completion of our acquisition of Actavis Generics and the proposed purchase of Anda Inc. We have brought together two leading businesses with complementary strengths, R&D capabilities, product pipelines and portfolios, geographical footprints, operational networks and cultures. The result is a stronger, more competitive Teva, well positioned to thrive in an evolving global marketplace," stated Erez Vigodman, President and CEO.
Vigodman continued, "Going forward we are focused on the integration of Actavis Generics, delivering on our operational and financial targets and on the ongoing development and commercialization of the more than 35 innovative products in our pipeline. We plan to use our strong cash flow to pay down debt and continue to invest in attractive specialty products. We are excited about our future and our ongoing pursuit to increase access to important medicines for patients around the world."
Second Quarter 2016 Results
Revenues in the second quarter of 2016 amounted to $5.0 billion, up 1% compared to the second quarter of 2015. Excluding the impact of foreign exchange fluctuations, revenues increased 4%.
Exchange rate differences between the second quarter of 2016 and the second quarter of 2015 reduced revenues by $141 million, GAAP operating income by $55 million and non-GAAP operating income by $52 million.
GAAP gross profit was $2.9 billion in the second quarter of 2016, down 1%, compared to the second quarter of 2015. GAAP gross profit margin was 57.1% in the quarter, compared to 58.4% in the second quarter of 2015. Non-GAAP gross profit was $3.2 billion in the second quarter of 2016, up 1% from the second quarter of 2015. Non-GAAP gross profit margin was 62.5% in the second quarter of 2016, compared to 62.8% in the second quarter of 2015.
Research and Development (R&D) expense (excluding equity compensation expenses and purchase of in-process R&D) in the second quarter of 2016 amounted to $370 million, compared to $357 million in the second quarter of 2015. R&D expenses were 7.3% of revenues in the quarter, compared to 7.2% in the second quarter of 2015. R&D expenses related to our generic medicines segment amounted to $125 million, compared to $134 million in the second quarter of 2015, a decrease of 7%. R&D expenses related to our specialty medicines segment amounted to $245 million, an increase of 11% compared to $220 million in the second quarter of 2015, mainly due to increased development costs related to assets acquired through the Labrys and Auspex transactions.
Selling and Marketing (S&M) expenses (excluding amortization of purchased intangible assets and equity compensation expenses) amounted to $898 million, or 17.8% of revenues, in the second quarter of 2016, compared to $846 million, or 17.0% of revenues, in the second quarter of 2015. S&M expenses related to our generic medicines segment amounted to $333 million, a decrease of 1% compared to $335 million in the second quarter of 2015, but an increase of 7% in local currency terms. The increase in local currency terms was mainly due to the additional costs related to our acquisition of Rimsa in the first quarter of 2016 and to the commencement of activities of our business venture in Japan. S&M expenses related to our specialty medicines segment amounted to $478 million, an increase of 5% in both U.S. dollar and local currency terms compared to $457 million in the second quarter of 2015, mainly due to increased royalties on sales.
General and Administrative (G&A) expenses (excluding equity compensation expenses) amounted to $299 million in the second quarter of 2016, or 5.9% of revenues, compared to $307 million and 6.2% in the second quarter of 2015.
GAAP operating income was $0.4 billion in the second quarter of 2016, down 45% compared to $0.7 billion in the second quarter of 2015. Quarterly non-GAAP operating income was $1.6 billion, down 2% compared to the second quarter of 2015.
EBITDA (non-GAAP operating income, which excludes amortization and certain other items, and excluding depreciation expenses for the period) amounted to $1.7 billion, down 1% compared to the second quarter of 2015.
GAAP financial expenses for the second quarter of 2016 amounted to $105 million, compared to $41 million in the second quarter of 2015. The increase in expenses is mainly the result of an impairment of our investment in Mesoblast. Non-GAAP financial expenses amounted to $6 million in the second quarter of 2016, compared to $41 million in the second quarter of 2015.
GAAP income tax expenses for the second quarter of 2016 amounted to $29 million, or 11% on pre-tax income of $256 million. In the second quarter of 2015, the provision for income taxes amounted to $88 million, or 14% on pre-tax income of $621 million. The provision for non-GAAP income taxes for the second quarter of 2016 amounted to $333 million on pre-tax non-GAAP income of $1.6 billion, for a quarterly tax rate of 21%. The provision for non-GAAP income taxes in the second quarter of 2015 was $345 million on pre-tax non-GAAP income of $1.6 billion, for a quarterly tax rate of 22%. While the tax rate may fluctuate quarterly, we expect our annual non-GAAP tax rate for 2016 to be 21%, similar to the rate in 2015.
For the second quarter of 2016, the weighted average outstanding shares for the fully diluted earnings per share calculation was 920 million on a GAAP basis and 979 million on a non-GAAP basis. The average weighted diluted shares outstanding used for the fully diluted share calculation for the second quarter of 2015 were 859 million shares, on both a GAAP and a non-GAAP basis. The increase in the number of shares resulted from our December 2015 equity offerings, with the number of shares on a non-GAAP basis including the potential dilution resulting from our mandatory convertible preferred shares, which had a dilutive effect on our non-GAAP earnings per share.
Excluding the impact of the December 2015 equity offerings to finance the Actavis Generics acquisition, the weighted average outstanding shares for the fully diluted earnings per share calculation on a non-GAAP basis for the second quarter of 2016 was 860 million shares.
As of June 30, 2016, the fully diluted share count for calculating Teva’s market capitalization was approximately 995 million shares.
GAAP net income attributable to Teva and GAAP diluted EPS were $254 million and $0.20, respectively, in the second quarter of 2016, compared to $539 million and $0.63, respectively, in the second quarter of 2015. Non-GAAP net income and non-GAAP diluted EPS were $1.2 billion and $1.25, respectively, in the second quarter of 2016, compared to $1.2 billion and $1.43 in the second quarter of 2015. Non-GAAP EPS adjusted to exclude the December 2015 equity offerings was $1.43.
Non-GAAP information: Net non-GAAP adjustments in the second quarter of 2016 amounted to $974 million. Non-GAAP net income and non-GAAP EPS for the quarter were adjusted to exclude the following items:
Impairment of long-lived assets of $572 million mainly related to Revascor and Zecuity;
Amortization of purchased intangible assets totaling $193 million, of which $146 million is included in cost of goods sold and the remaining $47 million in selling and marketing expenses;
Legal settlements and loss contingencies of $166 million mainly related to a settlement in principle reached in connection with the aripiprazole litigation;
Financial expenses of $99 million related to the impairment of our investment in Mesoblast;
Inventory step-up of $85 million;
Acquisition, integration and restructuring expenses of $82 million;
Other write-offs associated with the impairment of Zecuity and other items of $57 million;
Costs related to regulatory actions taken in facilities of $39 million;
Equity compensation of $28 million;
Minority interest adjustment of negative $43 million; and
Related tax benefit of $304 million.
The non-GAAP data presented by Teva are the results used by Teva’s management and board of directors to evaluate the operational performance of the company, to compare against the company’s work plans and budgets, and ultimately to evaluate the performance of management. Teva provides such non-GAAP data to investors as supplemental data and not in substitution or replacement for GAAP results, because management believes such data provides useful information to investors and facilitates investors’ understanding of its business. See the attached tables for a reconciliation of the U.S. GAAP results to the adjusted non-GAAP figures.
Cash flow from operations generated during the second quarter of 2016 amounted to $1.0 billion, a decrease of 35% compared to the second quarter of 2015. The decrease was mainly due to an increase in accounts receivables, net of SR&A, partially offset by an increase in accounts payable. Free cash flow, excluding net capital expenditures, amounted to $0.8 billion, a decrease of 40% compared to the second quarter of 2015.
Cash and investments at June 30, 2016 increased to $8.2 billion, compared to $7.2 billion at March 31, 2016.
Total shareholders’ equity was $32.0 billion at June 30, 2016, compared to $30.6 billion at March 31, 2016.
Segment Results for the Second Quarter 2016
Generic Medicines Segment
Three Months Ended June 30,
2016 2015
U.S.$ in millions / % of Segment Revenues

Revenues $ 2,294 100.0% $ 2,466 100.0%
Gross profit 1,072 46.7% 1,198 48.6%
R&D expenses 125 5.4% 134 5.4%
S&M expenses 333 14.5% 335 13.6%
Segment profit* $ 614 26.8% $ 729 29.6%

* Segment profit consists of gross profit for the segment, less R&D and S&M expenses related to the segment. Segment profit does not include G&A expenses, amortization and certain other items.
Generic Medicines Revenues
Generic medicines revenues in the second quarter of 2016 amounted to $2.3 billion, a decrease of 7% compared to the second quarter of 2015. In local currency terms, revenues decreased 4%.
Generic revenues consisted of:
U.S. revenues of $892 million, a decrease of 33% compared to the second quarter of 2015. The decrease resulted mainly from a decline in sales of aripiprazole (Abilify), esomeprazole (Nexium) and budesonide (Pulmicort) due to loss of exclusivity.
European revenues of $660 million, a decrease of 1%, in both U.S. dollar and local currency terms, compared to the second quarter of 2015. This resulted mainly from our strategy of pursuing profitable and sustainable business in the region along with higher API sales to third parties.
ROW revenues of $742 million, an increase of 56%, or 71% in local currency terms, compared to the second quarter of 2015. The increase in local currency terms was mainly due to higher revenues in Japan from our new business venture with Takeda, which commenced operations in April 2016, as well as an increase in revenues in Venezuela and Canada.
API sales to third parties of $207 million (which is included in the market revenues above), an increase of 13%, compared to the second quarter of 2015, with higher revenues in both Europe and the United States.
Generic medicines revenues comprised 46% of our total revenues in the quarter, compared to 50% in the second quarter of 2015.
Generic Medicines Gross Profit
Gross profit from our generic medicines segment in the second quarter of 2016 amounted to $1.1 billion, a decrease of 11% compared to the second quarter of 2015. The lower gross profit was mainly a result of the lower sales of aripiprazole (Abilify) and esomeprazole (Nexium) in the United States, which are both high gross profit products. This decrease was partially offset by higher gross profit of our ROW and European markets and of our API business. Gross profit margin for our generic medicines segment in the second quarter of 2016 decreased to 46.7%, from 48.6% in the second quarter of 2015.
Generic Medicines Profit
Our generic medicines segment generated profit of $614 million in the second quarter of 2016, a decrease of 16% compared to the second quarter of 2015. Generic medicines profitability as a percentage of generic medicines revenues was 26.8% in the second quarter of 2016, down from 29.6% in the second quarter of 2015. The decrease was primarily due to the lower gross profit of the segment.
Specialty Medicines Segment
Three Months Ended June 30,
2016 2015
U.S.$ in millions / % of Segment Revenues

Revenues $ 2,271 100.0% $ 2,090 100.0%
Gross profit 1,978 87.1% 1,808 86.5%
R&D expenses 245 10.8% 220 10.5%
S&M expenses 478 21.0% 457 21.9%
Segment profit* $ 1,255 55.3% $ 1,131 54.1%

* Segment profit is comprised of gross profit for the segment, less R&D and S&M expenses related to the segment. Segment profit does not include G&A expenses, amortization and certain other items.
Specialty Medicines Revenues
Specialty medicines revenues in the second quarter of 2016 amounted to $2.3 billion, an increase of 9% compared to the second quarter of 2015. U.S. specialty medicines revenues amounted to $1.8 billion, up 9% compared to the second quarter of 2015. European specialty medicines revenues amounted to $414 million, an increase of 10%, or 9% in local currency terms, compared to the second quarter of 2015. ROW specialty revenues amounted to $85 million, down 6%, though up 5% in local currency terms, compared to the second quarter of 2015.
Specialty medicines revenues comprised 45% of our total revenues in the quarter, compared to 42% in the second quarter of 2015.
The increase in specialty medicines revenues compared to the second quarter of 2015 was due to higher revenues in all our core therapeutic areas.
The following table presents revenues by therapeutic area and key products for our specialty medicines segment for the three months ended June 30, 2016 and 2015:


Three Months Ended
June 30,
Percentage
Change
2016 2015 2016 – 2015
U.S. $ in millions
CNS $ 1,415 $ 1,353 5%
Copaxone 1,141 1,054 8%
Azilect 108 105 3%
Nuvigil 51 91 (44%)
Respiratory 313 253 24%
ProAir 135 128 5%
QVAR 116 83 40%
Oncology 334 293 14%
Treanda and Bendeka 207 179 16%
Women’s Health 117 110 6%
Other Specialty 92 81 14%
Total Specialty Medicines $ 2,271 $ 2,090 9%

Global revenues of Copaxone (20 mg/mL and 40 mg/mL), the leading multiple sclerosis therapy in the U.S. and globally, amounted to $1.1 billion, an increase of 8% compared to the second quarter of 2015.
Copaxone revenues in the United States amounted to $955 million, an increase of 10% compared to the second quarter of 2015. The increase was mainly due to a reduction of sales in the Medicaid channel, resulting in both lower rebates in the current quarter and a positive change in the estimate for rebates in prior quarters, as well as the impact of a price increase of 7.9% in January 2016 on both Copaxone products. At the end of the second quarter of 2016, according to June 2016 IMS data, our U.S. market shares for the Copaxone products in terms of new and total prescriptions were 24.9% and 29.1%, respectively. Copaxone 40 mg/mL accounted for 82% of total Copaxone prescriptions in the U.S.
Copaxone revenues outside the United States amounted to $186 million, an increase of 1%, or 3% in local currency terms, compared to the second quarter of 2015 due to higher volumes in certain European and ROW markets.
Our global Azilect revenues amounted to $108 million, an increase of 3% compared to the second quarter of 2015. Global in-market sales decreased 9% due to generic competition in certain European markets.
Revenues of our respiratory products amounted to $313 million, up 24% compared to the second quarter of 2015. ProAir revenues in the quarter amounted to $135 million, up 5% compared to the second quarter of 2015, due to positive price effects, partially offset by lower volumes. QVAR global revenues amounted to $116 million in the second quarter of 2016, up 40% compared to the second quarter of 2015, mainly due to positive price effects.
Revenues of our oncology products amounted to $334 million in the second quarter of 2016, up 14% from the second quarter of 2015. Revenues of Treanda and Bendeka amounted to $207 million, an increase of 16% compared to the second quarter of 2015, mainly due to higher volumes sold.
Specialty Medicines Gross Profit
Gross profit from our specialty medicines segment amounted to $2.0 billion, an increase of $170 million compared to the second quarter of 2015. Gross profit margin for our specialty medicines segment in the second quarter of 2016 was 87.1%, compared to 86.5% in the second quarter of 2015.
Specialty Medicines Profit
Our specialty medicines segment profit amounted to $1.3 billion in the second quarter of 2016, up 11% compared to the second quarter of 2015, mainly due to higher gross profit, which was partially offset by increases in S&M and R&D expenses.
Specialty medicines profit as a percentage of segment revenues was 55.3% in the second quarter of 2016, up from 54.1% in the second quarter of 2015.
The following tables present details of our multiple sclerosis franchise and of our other specialty medicines for the three months ended June 30, 2016 and 2015:
Multiple Sclerosis
Three months ended June 30,
2016 2015
U.S.$ in millions / % of MS Revenues

Revenues $ 1,141 100.0% $ 1,054 100.0%
Gross profit 1,029 90.2% 953 90.4%
R&D expenses 20 1.8% 26 2.5%
S&M expenses 81 7.1% 88 8.3%
MS profit $ 928 81.3% $ 839 79.6%

Other Specialty
Three months ended June 30,
2016 2015
U.S.$ in millions / % of Other Specialty Revenues

Revenues $ 1,130 100.0% $ 1,036 100.0%
Gross profit 949 84.0% 855 82.5%
R&D expenses 225 19.9% 194 18.7%
S&M expenses 397 35.2% 369 35.6%
Other Specialty profit $ 327 28.9% $ 292 28.2%

Other Activities
Our OTC revenues related to PGT amounted to $262 million, an increase of 25% compared to $210 million in the second quarter of 2015. In local currency terms, revenues increased 58%, mainly due to inflation in Venezuela. PGT’s in-market sales amounted to $379 million in the second quarter of 2016, an increase of $54 million compared to the second quarter of 2015.
Other revenues amounted to $211 million in the second quarter of 2016, mostly from the distribution of third-party products in Israel and Hungary, compared to revenues of $200 million, in the second quarter of 2015.
FY 2016 Financial Outlook
We expect revenues for 2016 to be $22.0-22.5 billion.
Non-GAAP EPS for 2016 is expected to be $5.20-5.40, based on a weighted average number of shares of 1,021 million.
Cash flow from operating activities for 2016 is expected to be $5.7-6.1 billion.
These estimates reflect management’s current expectations for Teva’s performance in 2016. Actual results may vary, whether as a result of exchange rate differences, market conditions or other factors. In addition, the non-GAAP figures exclude the amortization of purchased intangible assets, costs related to certain regulatory actions, inventory step-up, legal settlements and reserves, impairments and related tax effects.
Dividends
On August 1, 2016, the Board of Directors declared a cash dividend of $0.34 per ordinary share for the second quarter of 2016. For holders of our ordinary shares that are traded on the Tel Aviv Stock Exchange, the dividend will be converted into new Israeli shekels based on the official exchange rate as of August 4, 2016. The record date will be August 22, 2016, and the payment date will be September 8, 2016. Tax will be withheld at a rate of 15%.
On August 1, 2016, the Board of Directors further declared a quarterly cash dividend of $17.50 per mandatory convertible preferred share. The record date will be September 1, 2016 and the payment date will be September 15, 2016. Tax will be withheld at a rate of 15%.

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On August 4, 2016 Five Prime Therapeutics, Inc. (Nasdaq:FPRX), a clinical-stage biotechnology company focused on discovering and developing innovative immuno-oncology protein therapeutics, reported a corporate update and reported financial results for the second quarter ended June 30, 2016 (Press release, Five Prime Therapeutics, AUG 4, 2016, View Source [SID:1234514240]).

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"We’re pleased with the progress we’ve made through the first half of the year and remain on track with our clinical programs," said Lewis T. "Rusty" Williams, M.D., Ph.D., president and chief executive officer of Five Prime. "At ASCO (Free ASCO Whitepaper) in June, we announced early but encouraging Phase 1 data for our FGFR2b antibody, FPA144, including confirmed partial responses in three of nine patients with FGFR2b+ gastric tumors and one confirmed complete response in a patient with bladder cancer. Notably, FPA144 recently received FDA Orphan Drug Designation in patients with FGFR2b+ gastric cancer. Development of our anti-CSF1R antibody, FPA008, now named cabiralizumab, is also progressing according to plan. We still expect the Phase 1b dose expansion portion of the trial combining cabiralizumab with OPDIVO (nivolumab) in multiple tumor types to begin during the second half of 2016. Also on track is our Phase 2 clinical trial of cabiralizumab in patients with pigmented villonodular synovitis (PVNS), a rare indication for which we received FDA Orphan Drug Designation."

Business Highlights and Recent Developments

Clinical Pipeline:

FPA008 (cabiralizumab): an investigational antibody that inhibits CSF1R and has been shown to block the activation and survival of monocytes and macrophages. In some cancers, macrophages suppress the immune system’s ability to kill cancer cells. In pigmented villonodular synovitis (PVNS), macrophages form the bulk of the tumor mass in joints. Cabiralizumab blocks the activation and survival of these cell types. Five Prime and Bristol-Myers Squibb (BMS) have an exclusive worldwide collaboration agreement for the development and commercialization of cabiralizumab.

Advanced Phase 1a/1b cabiralizumab/OPDIVO combination trial.
Five Prime continued dose exploration in the Phase 1a/1b clinical trial evaluating the safety, tolerability and preliminary efficacy of the immunotherapy combination of cabiralizumab with OPDIVO, BMS’s PD-1 immune checkpoint inhibitor. The trial is currently expected to enroll up to 280 patients and remains on target to move into Phase 1b during the second half of 2016.

Advanced clinical trial of cabiralizumab in patients with PVNS into Phase 2 in May.
Five Prime advanced cabiralizumab into the Phase 2 dose expansion portion of the ongoing Phase 1/2 trial in PVNS, a CSF-1 receptor-driven tumor. The Phase 2 portion is evaluating clinical measures including response rate, pain and range of motion in approximately 30 PVNS patients. The U.S. Food and Drug Administration (FDA) granted cabiralizumab Orphan Drug Designation for the treatment of PVNS. Five Prime estimates the U.S. prevalence for diffuse PVNS patients may be as high as 25,000 patients.

FPA144: an isoform-selective antibody in development as a targeted immuno-therapy for tumors that over-express FGFR2b, a splice variant of a receptor for some members of the fibroblast growth factor (FGF) family. FPA144 has been engineered for enhanced antibody-dependent cell-mediated cytotoxicity (ADCC) to increase direct tumor cell killing by recruiting natural killer (NK) cells.

In July, received FDA Orphan Drug Designation for FPA144 for the treatment of gastric cancer and cancer of the gastroesophageal junction in patients whose tumors overexpress FGFR2b.

Presented data from the ongoing Phase 1 trial of FPA144 in an oral session at the 2016 American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Annual Meeting in June.

FPA144 monotherapy demonstrated early evidence of anti-tumor efficacy in gastric cancer patients with FGFR2b protein overexpression from Part 1b and Part 2 of the trial. These heavily pre-treated patients had received between 1 and 6 prior therapies with a median of 2 prior therapies. The highlights of the data presented at ASCO (Free ASCO Whitepaper) include:

Efficacy as of the April 1, 2016 data cutoff:
3 confirmed partial responses (PRs) out of 9 gastric cancer patients treated (33%); 1 of these 3 PRs was confirmed after the data cutoff
7 of 9 gastric cancer patients with disease control (3 PRs + 4 stable disease), disease control rate (DCR) = 77%
12-week progression-free survival (PFS) in 6 of 9 gastric cancer patients (67%)
Median duration of treatment of 112 days (range 42-182 days), with 2 of 9 gastric cancer patients still on study
A patient with metastatic bladder cancer in the dose escalation portion of the trial in solid tumors achieved a confirmed complete response (CR)

In addition to the 3 PRs in gastric cancer noted above, there was an additional unconfirmed PR in the 10th gastric cancer patient with FGFR2b protein overexpression, whose scan became available after the data cutoff.
Safety as of the April 1, 2016 data cutoff:

No dose-limiting toxicities (DLTs); maximum-tolerated dose (MTD) was not reached
No treatment-related serious adverse events (SAEs)
The most common treatment-related AEs ( > 5%) were all grades 1 or 2: fatigue (22.5%), nausea (20%) and vomiting (12.5%)

Presented preclinical data for FPA144 at the American Association for Cancer Research (AACR) (Free AACR Whitepaper) Annual Meeting. FPA144 was featured in two presentations at the AACR (Free AACR Whitepaper) Annual Meeting in April 2016. Five Prime demonstrated that FPA144’s enhanced ADCC mechanism drives innate and adaptive immune responses in the tumor microenvironment, recruiting NK and T cells into the tumor. Additionally, FPA144 produced an additive effect on tumor growth inhibition when combined with PD-1 blockade. These pre-clinical findings suggest the therapeutic potential for a combination of FPA144 with a checkpoint inhibitor.

FP-1039: a protein drug designed to intervene in FGF signaling. As a ligand trap, FP-1039 binds to and neutralizes FGF ligands (such as FGF2), preventing these signaling proteins from reaching FGFR1 on the surface of tumor cells.

GSK presented data in mesothelioma patients from the ongoing Phase 1b trial of FP-1039 at the 2016 ASCO (Free ASCO Whitepaper) Annual Meeting.

Although GSK has terminated its FP-1039 license from Five Prime, GSK is continuing to conduct the ongoing study of FP-1039 in combination with 1st-line pemetrexed and cisplatin in patients with untreated, unresectable mesothelioma. GSK has now capped the trial at the 25 patients enrolled at the 15 mg/kg dose.

The trial data are not sufficiently mature for Five Prime to make decisions yet on potential future development of FP-1039 in mesothelioma. Those decisions will be based on our future assessment of the response rate and durability in this trial, as well as other considerations, such as drug supply and manufacturing.
Preclinical Research and Development:

Progressed internal immuno-oncology research programs. Five Prime continues to advance multiple immuno-oncology candidates through preclinical development and expects to have two programs entering pre-IND studies before the end of 2016. The company anticipates filing one IND by the end of 2017 and to have preclinical assets sufficient to keep the pace of one IND per year for the foreseeable future.

GSK licensed intellectual property for respiratory disease target identified using Five Prime’s proprietary protein discovery platform. In June, GSK exercised its option to take an exclusive license to the intellectual property related to a target under the 2012 respiratory diseases research collaboration between the companies. This triggered a $1.5 million license payment to Five Prime, which was recognized as revenue in the second quarter. Five Prime is eligible to receive up to $92.75 million in contingent milestone payments for each product that targets the licensed protein.
Summary of Financial Results and Guidance:

Cash Position. Cash, cash equivalents and marketable securities totaled $469.2 million on June 30, 2016, compared to $517.5 million on December 31, 2015. The decrease in cash was primarily attributable to cash used in operations to advance the FPA144 clinical trial, preclinical programs and tax payments.

Revenue. Collaboration revenue for the second quarter of 2016 increased by $2.9 million to $9.2 million from $6.3 million in the second quarter of 2015. This increase was primarily due to revenue recognized under the 2015 cabiralizumab collaboration agreement with BMS, under which Five Prime is reimbursed for the immuno-oncology trial expenses.

R&D Expenses. Research and development expenses for the second quarter of 2016 increased by $8.9 million, or 66.9%, to $22.2 million from $13.3 million in the second quarter of 2015. This increase was primarily related to advancing the FPA144 clinical trial, preclinical development and immuno-oncology research programs.

G&A Expenses. General and administrative expenses for the second quarter of 2016 increased by $3.5 million, or 76.1%, to $8.1 million from $4.6 million in the second quarter of 2015. This increase was primarily due to increases in cash and stock-based compensation expenses.

Net Loss. Net loss for the second quarter of 2016 was $13.1 million, or $0.49 per basic and diluted share, compared to a net loss of $11.5 million, or $0.45 per basic and diluted share, for the second quarter of 2015.

Shares Outstanding. Total shares outstanding were 28.3 million as of June 30, 2016.

Cash Guidance. Five Prime continues to expect full-year 2016 net cash used in operating activities to be less than $120 million, comprising less than $90 million used in operations and less than $30 million used for tax payments. The company estimates ending 2016 with approximately $400 million in cash, cash equivalents and marketable securities.

On August 5, 2016 Medigene AG (MDG1, Frankfurt, Prime Standard), a clinical stage immuno-oncology company focusing on the development of T-cell immunotherapies for the treatment of cancer, reported financial results and corporate updates for the first six months of 2016 (Press release, MediGene, AUG 4, 2016, View Source [SID:1234514267]).

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Major events since the beginning of 2016:

Immunotherapies:

Phase II of Phase I/II trial with DC vaccine for the treatment of acute myeloid leukaemia (AML) initiated following positive recommendation by DSMB
Collaboration started with Max Delbrück Center and The Charité in Berlin for Germany’s first investigator-initiated clinical TCR trial
DC platform and TCR platform strengthened by new patents
Additional viral vector production capacities secured for clinical TCR trials
Company:

Expansion of management team
Capital increase by contribution in kind to fund milestone payment for the beginning of Phase II of Medigene’s Phase I/II trial with DC vaccines
Key figures in the first half of 2016:

R&D expenses increased by 23% to €5,079 k (6M 2015: €4,117 k)
Total revenue increased by 62% to €5,470 k (6M 2015: €3,372 k)
EBITDA loss reduced by 6% to €4,011 k (6M 2015: €4,251 k)
Cash and cash equivalents and time deposits increased by 4% to €48,672 k (12/31/2015: €46,759 k)
Prof. Dolores Schendel, Chief Executive Officer and CSO of Medigene AG, comments: "In recent months we have made huge advances in preparations for the clinical development of TCRs and strengthened our portfolio of patents for this highly innovative therapy. In addition, our DC trial reached a meaningful milestone with progression into Phase II. I am delighted to be able to announce such significant progress in the first five months of my term as CEO of Medigene AG."

Dave Lemus, Chief Operating Officer of Medigene AG adds: "The continued improvement in our financial position in the first six months of 2016 reflects in part the successful repositioning of Medigene as a leading player in the field of immuno-oncology. Moreover, our solid financial situation allows us to increasingly exploit the full potential of our immunotherapy capabilities by funding further research and development activities."

Key figures in first half of 2016:

In € k 6M-2016

6M-2015

Change

Results of operations
Revenue 1,385 1,363 2%
Other operating income 4,085 2,009 103%
thereof gain on sale of intangible assets, net 2,365 0 -
Total revenue 5,470 3,372 62%
Cost of sales -773 -471 64%
Gross profit 4,697 2,901 62%
Selling and general administrative expenses -4,013 -3,476 15%
Research and development expenses -5,079 -4,117 23%
Operating result -4,395 -4,692 -6%
Income from the sale of financial assets 4,242 0 -
Net profit/loss for the period -401 -6,113 -93%
EBITDA -4,011 -4,251 -6%
Earnings per share (€) -0.02 -0.44 -95%
Personnel expenses -4,536 -3,581 27%

Cash flows
Net cash used in operating activities -8,818 -4,953 78%
Net cash from/used in investing activities 10,864 -159 >-200%
Net cash from financing activities -132 195 -168%

Balance sheet data as at June 30, 2016 and December 31, 2015
Cash and cash equivalents and time deposits 48,672 46,759 4%
Total assets 105,599 113,531 -7%
Current liabilities 5,244 9,664 -46%
Non-current liabilities 12,781 13,879 -8%
Shareholders’ equity 87,574 89,988 -3%
Equity ratio (%) 83 79 5%

Employees as at June 30 80 71 13%
FTE as at June 30 73 65 12%

Medigene share as at June 30
Total number of shares outstanding 20,088,260 14,051,815 43%
Total revenue of the Company increased by 62% to €5,470 k in the reporting period (6M 2015: €3,372 k) on account of non-recurring impacts related to the sale of EndoTAG in December 2015. Income of €2,365 k was generated by this sale in the first quarter of 2016. The Company generates its revenue and other operating income from its non-core business.

Research and development expenses increased by 23% in the first six months of 2016 to €5,079 k (6M 2015: €4,117 k) as expected. The increase in these expenses is mainly due to planned increases in expenses for preclinical and clinical trials for Medigene’s immunotherapies which increased significantly by 68% to €4,345 k in the first six months of 2016 (6M 2015: €2,585 k). This increase was partially offset by the decrease in development expenses for other sold products.

Despite higher research and development expenses for Medigene’s immunotherapy programs, the EBITDA loss decreased by 6% in the first half of 2016 to €4,011 k (6M-2015: €4,251 k). Medigene’s EBITDA is derived from the net profit/loss for the period; it excludes any taxes, financial results (comprising interest income, interest expense, other financial result and income the sale of financial assets), foreign exchange gains or losses, share of results of associates, or depreciation or amortization.

Due to non-recurring effects, including the sale of EndoTAG and Immunocore shares, the net loss after taxes improved in the first six months of 2016 to just €401 k (6M 2015: €6,113 k).

The net cash used in operating activities increased to €8,818 k in the first half of 2016 (6M 2015: €4,953 k). This represents an average monthly cash outflow of €1.5 m in the first six months of 2016 (6M 2015: €0.8 m). The major part of the cash used was directed at research and development, sales and administration and an increase in working capital. The current level of cash used in operating activities is not indicative of future trends as it is significantly impacted by non-recurring payments in partner arrangements and research and development expenses, which in turn are impacted by project stage/status.

Medigene recorded a cash inflow from investing activities of €10,864 k in the first six months of 2016 in contrast to a cash outflow of €159 k in the comparable period of the prior year. The cash inflow resulted primarily from the sale of shares in Immunocore Ltd. for €6 m and from the sale of Catherex, Inc. to Amgen Inc. for €4 m.

The cash and cash equivalents and time deposits of the Company amounted to €48,672 k as at the end of the reporting period (December 31, 2015: €46,759 k). Medigene generated a cash inflow of €10,672 k from the above sales.

Financial forecast 2016:
Medigene confirms its financial guidance for the fiscal year 2016. In line with previous expectations, the Company plans to expand its clinical development programs, which will significantly increase R&D expenses in the immunotherapies segment to €9 – 11 m (2015: €5.5 m). The EBITDA loss for 2016 is anticipated to come to €10 -12 m (2015: €9.5 m).

The Company expects total Veregen revenue of €3 – 4 m in 2016 (2015: €3.1 m), and stable or increasing total revenue (2015: €6.8 m). As revenue is not generated in the Company’s core business of immunotherapies, these figures are not indicative of progress in the Company’s core business.. This financial guidance also does not include any possible revenues from potential new partnership agreements, or any exchange rate fluctuation.

The detailed 6-Months Report 2016 is available online at:
View Source

On August 4, 2016 Karyopharm Therapeutics Inc. (Nasdaq:KPTI), a clinical-stage pharmaceutical company, reported financial results for the second quarter 2016 and commented on recent accomplishments and clinical development plans for its lead, novel, oral Selective Inhibitor of Nuclear Export (SINE) compound selinexor (KPT-330), and other pipeline assets, including KPT-8602, its second-generation SINE compound, and KPT-9274, its oral, dual inhibitor of p21-activated kinase 4 (PAK4) and nicotinamide phosphoribosyltransferase (NAMPT) (Filing, Q2, Karyopharm, 2016, AUG 4, 2016, View Source [SID:1234514318])).

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"In the first half of 2016, we continued to drive rapid and meaningful progress across our development programs, including completion of enrollment in our Phase 2b STORM study in multiple myeloma (MM), the opening of a Phase 1b study arm evaluating selinexor in combination with the PD-1 inhibitor pembrolizumab in advanced solid tumors, and the advancement of KPT-9274 into the clinic," said Michael G. Kauffman, MD, PhD, Chief Executive Officer of Karyopharm. "At the 2016 European Hematology Association (EHA) (Free EHA Whitepaper) Annual Meeting, we presented exciting preliminary data from our Phase 1b STOMP study showing high response rates, along with durable activity and a favorable safety profile when selinexor is combined with standard-of-care agents in heavily pre-treated patients with MM."

Dr. Kauffman continued, "We remain on track for data readouts from several of our ongoing selinexor studies, including top-line results from the STORM and STOMP studies in relapsed/refractory MM, updated data from the SIGN study in gynecologic malignancies at the European Society of Medical Oncology (ESMO) (Free ESMO Whitepaper) 2016 Annual Meeting, and an interim analysis from the ongoing Phase 2 SOPRA study in relapsed/refractory acute myeloid leukemia (AML) in late 2016. For KPT-8602, our second generation SINE compound, we look forward to reporting top-line safety and tolerability results from the Phase 1 portion of the ongoing study in patients with relapsed/refractory MM in late 2016. All of these efforts bring us ever closer to our goal of providing novel, first-in-class medicines to patients with cancer and other major diseases. We look forward to keeping you updated on our progress."